Shale Oil's Retreat Threatens to Leave U.S. Short on Natural Gas
- Citigroup says drilling decline may cut gas output by 1 Bcf
- U.S. has forecast fourth straight month of gas output declines
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The retrenchment in drilling for U.S. oil is threatening to leave a different market short: natural gas.
“The impacts of oil rig counts extend beyond oil: the outlook for U.S. natural gas is critically dependent on the outcome of this balancing act in U.S. oil rigs,” Anthony Yuen, a strategist at Citigroup Inc. in New York, said in a report to clients Wednesday. “If the oil market remains oversupplied and oil-rig counts fall, the decline in associated gas production would leave the market short of gas.”